7 January Money Moves to Kickstart a Wealthy 2025

The start of a new year isn’t just for gym memberships—it’s also the perfect time to get your finances in shape! Today, I’ll show you 7 actionable steps to save on taxes, grow your wealth, and set yourself up for a successful year ahead.

Just like you shouldn’t skip leg day at the gym, try not to skip any of these steps. 

1. Compare Your Net Worth From Last Year to This Year

Why It’s Important

Tracking your net worth is a lot like stepping on the scale after binge eating during the holidays—you might not like what you see, but it’s important! Think of your net worth as your financial fitness check. 

Year-over-year tracking reveals whether you’re moving closer to your goals. Did your net worth grow, shrink, or stay the same? Knowing where you stand empowers you to refocus and make informed decisions for the year ahead. This is the very first thing I do on January 1, right after recovering from my hangover of course!

How to Do It

Calculating your net worth is straightforward:

1. List all your assets, including cash, investments, real estate, and any other valuable holdings.
2. Subtract your liabilities, such as mortgages, loans, and credit card debt.
3. Use a method that works best for you—a budgeting app, a notebook, or a spreadsheet.

I personally recommend using a spreadsheet for its flexibility and customization. It allows you to categorize your finances, track trends over time, and gain a deeper understanding of your financial situation. To make it even easier, I’ve created a free Net Worth Tracker, plus a detailed video on how to use it!

Motivation for the new year

If your net worth grew this year, take a moment to celebrate your achievements—whether it’s paying down debt, increasing savings, or growing your investments. Equally important, take the time to understand why it grew, so you can try to replicate those successes in the future.

If it didn’t, use this as an opportunity to reflect on what went wrong and make a plan to course-correct. Each step forward is progress, and knowing where you stand is the first step toward improvement.

2. Review Your Investments and Performance

Why It’s Important

Reviewing your 2024 portfolio performance helps you refine your strategy for 2025. Investments are influenced by investment choices, market conditions, economic trends, and geopolitical events, so reflecting on both successes and setbacks is essential for making better decisions.

• If you had a strong year, like earning 30%, consider what drove that success: diversification, strong stock picks, or favourable markets?
• If you experienced losses, analyze the causes—overexposure to one sector, reacting emotionally to dips, or insufficient diversification.

Understanding what worked and what didn’t prepares you to make more resilient investment decisions.

How to Do It

1. Review Performance: Assess how each investment performed. For example, “My portfolio earned 30%, but I need better diversification.” Examine underperforming sectors to determine if losses stemmed from trends or specific holdings.
2. Assess Allocation: Check if your portfolio reflects your goals and risk tolerance. Is it too equity-heavy or overly conservative?
3. Spot Biases: Avoid pitfalls like “recency bias” (overweighting recent trends) or “loss aversion” (focusing too much on avoiding losses).
4. Pro Tip: When reviewing investments, focus on your long-term goals to avoid reacting emotionally to short-term market fluctuations.

Next Steps

• Rebalance: Adjust overperforming assets to align with your goals, such as reallocating tech gains into bonds or undervalued sectors.
• Identify Opportunities: Explore sectors with long-term growth potential, like renewable energy, if they underperformed in 2024.
• Document Strategy: Write a clear plan for 2025, including when to rebalance and how to manage volatility, to stay focused and disciplined.

3. Prioritize Contributions to Tax-Advantaged Accounts

Why It’s Important

Tax-advantaged accounts like TFSAs, FHSAs, and RRSPs offer unmatched tax savings and compounding growth potential. Contributing early in the year gives your investments more time to grow, helping you build wealth, save for a home, or prepare for retirement.

How to Do It

• TFSA: Max out your $7,000 contribution room for 2025 (or unused space). Tax-free growth makes this a powerful wealth-building tool.
• FHSA: Ideal for first-time homebuyers, offering tax deductions (like an RRSP) and tax-free withdrawals (like a TFSA). Its flexibility also makes it a solid long-term option.
• RRSP: Reduce your taxable income now while saving for retirement. Perfect for high earners who expect a lower tax bracket in retirement. Be mindful of contribution limits and the March deadline.
• RESP: If you have kids, contribute regularly to maximize government grants (up to $500 annually per child) and tax-sheltered growth for education.

Pro Tips:

Unsure where to start?

• High-income earners: Prioritize RRSP contributions for tax breaks.
• Moderate or low-income earners: Focus on the TFSA for flexibility and tax-free growth.
• Saving for a home? Use the FHSA for its unique tax advantages.

Here’s a quick cheat sheet though of the pros and cons of each one:

Table: TFSA vs. RRSP vs. FHSA vs. RESP Benefits

Next Steps

For a deeper dive into maximizing these accounts, check out my video on the ideal investment order for Canadians. It breaks down how to prioritize these tools for any financial situation.

4. Plan Tax-Saving Strategies for 2025

Why It’s Important

Taxes can be one of your biggest expenses, but proactive planning helps reduce your liability, letting you keep more of your hard-earned money for your goals.

How to Do It

• Income Splitting: Contribute to a spousal RRSP to lower household taxes or hire a family member for legitimate business work.
• Deductions:
  • Medical Expenses: Prepay to exceed the claim threshold.
  • Charitable Contributions: Donate appreciated securities to avoid capital gains taxes and get a tax credit.
  • Childcare Costs: Claim daycare, nanny, or camp expenses.
  • Moving Expenses: Deduct eligible costs for work or school relocations.
  • Home Office: Claim rent, utilities, and internet costs if working from home.
• Tax Credits:
  • Tuition and Education Credits: Transfer unused credits or carry forward.
  • Canada Training Credit: Claim up to $250 for eligible training costs.
  • Disability Tax Credit: Don’t miss this if you or a dependent qualifies.

Pro Tip

Start early to organize receipts, statements, and expenses to maximize deductions and credits stress-free. Here at Blueprint, we focus a lot on tax-saving strategies as an easy way to save clients money.

5. Set Clear Financial Goals and Automate

Why It’s Important

Clear financial goals give your plan purpose and direction, acting as a roadmap to prioritize and stay on track. Automation ensures consistent progress by removing the need for constant decision-making, reducing procrastination and missed opportunities.

How to Do It

1. Define Your Goals
   Make your goals specific and measurable, such as:
   • Pay off $6,000 in credit card debt by year-end.
   • Save $5,000 for a vacation.
   • Build a $15,000 emergency fund (six months of expenses).
   • Contribute the full $7,000 TFSA limit or a portion of your RRSP.
   • Save $8,000 for an FHSA or home down payment.
2. Break Goals Into Milestones
   • Instead of saving $12,000 for a vacation, target $1,000 per month or $250 per week.
   • For $6,000 in debt repayment, aim for $500 monthly or $125 weekly.
     Celebrate small wins to stay motivated!
3. Automate Contributions
   • Savings: Set automatic transfers to a high-interest savings account or TFSA.
   • Investments: Use pre-authorized contributions for RRSPs, FHSAs, or other accounts.
   • Debt Repayment: Schedule payments to reduce balances and avoid late fees.

Pro Tip

Schedule contributions right after payday to prioritize savings and avoid spending the funds.

Motivation
Automating and breaking down goals simplifies the process and keeps you focused. Watching your savings grow or debt shrink builds momentum, making financial success achievable and rewarding.

6. Review Retirement Income and Benefits (For Retirees)

Why It’s Important

Retirement planning doesn’t stop when you stop working. Managing income sources, taxes, and benefits ensures your savings last and helps sustain your lifestyle without overpaying taxes.

How to Do It

1. CPP and OAS
   • Optimize Timing: Delaying CPP to age 70 increases payments by 42%, providing more stable income later.
   • Avoid Clawbacks: If income exceeds the OAS clawback threshold ($90,997 for 2024), defer OAS or adjust income sources to avoid losing benefits.
2. Pension Splitting
   • Split eligible pension income with a lower-earning spouse to reduce household taxes. For example, transferring $20,000 can lower tax brackets for both partners.
3. RRIF Withdrawals
   • Withdraw strategically to avoid higher tax brackets. Example: $10,000 per year instead of $20,000.
   • Transfer excess withdrawals into a TFSA to shelter further growth from taxes.
4. Non-Registered Investments
   • Use tax-efficient strategies:
     • Hold Canadian dividend-paying stocks to benefit from tax credits.
     • Harvest capital losses to offset gains and reduce taxes.
5. Government Credits and Benefits
   • Claim the Age Credit and Disability Tax Credit if eligible.
   • Use the Home Accessibility Tax Credit for renovations improving home safety.
6. Estate Planning
   • Update wills and beneficiaries to align with your wishes and minimize estate taxes.

Pro Tip

Stress-test your plan for scenarios like market downturns or unexpected medical costs. For example, check if your portfolio can handle a 20% drop or extra $10,000 annually for things like healthcare or travel. We do this with every financial plan we prepare for our clients here at Blueprint. 

Staying proactive ensures you maximize income, minimize taxes, and maintain financial peace of mind.

7. Organize and Prepare for Tax Season

Why It’s Important

Tax season can be overwhelming, but starting early helps you avoid costly mistakes, claim all deductions and credits, and maximize your refund. Staying organized simplifies the process, saving you time and stress.

How to Do It

1. Gather Documents
   • Collect RRSP slips, donation receipts, T4s, T5s, tuition credits, and receipts for medical, childcare, and home office expenses.
   • Keep everything in a physical or digital folder for easy access.
2. Review and Update Details
   • Will: Ensure it reflects your current wishes, especially after major life changes.
   • Insurance: Confirm coverage and update beneficiaries for RRSPs, TFSAs, and life insurance policies.
3. Plan Ahead
   • Use tax software for simple returns to ensure accuracy and catch deductions.
   • Hire a professional for complex needs, like small business income or rental properties.

Pro Tip

File early if expecting a refund to get your money faster. If you owe taxes, filing early gives you time to plan payments and avoid late fees. Starting now puts you in control of tax season.

Tracking your net worth, optimizing investments, and reducing taxes are key steps to building wealth and confidence in 2025. At Blueprint Financial, we specialize in helping you turn these strategies into a personalized plan for success. 

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